Zell makes big move in Chicago

Global real estate mogul Sam Zell is expanding his position in the hotel business in a big way after Crain’s Chicago Business reported on Saturday that he is acquiring the two-year-old, 188-room ultra-luxury Elysian Hotel in Chicago for about US$95 million. Unconfirmed reports suggested billionaire Zell will convert the hotel he acquired for a Chicago-record US$505,000 a key it into a Waldorf Astoria operated by Hilton Worldwide.

Just last week, Zell’s Equity International announced it would invest US$75 million in SAMHI, an Indian hotel developer that has a partnership with Marriott International.

Zell already owns a 4.7% stake in Starwood Hotels & Resorts Worldwide and has invested in distressed hotel debt through Zell Credit Opportunities Fund L.P., a $625-million investment fund he launched in 2009.

Part of a 60-story project with 51 condominiums, the struggling Elysian was developed by entrepreneur David Pisor, nephew of famed California restaurateur Alice Waters. Pisor financed the deal with a US$203-million construction loan from Hypo Real Estate Group, a German lender, and about US$60 million in equity from Arcapita.

Despite the development’s struggles, the Chanel-inspired 5-star was named the best U.S. hotel in a recent survey by Condé Nast Traveler.

Lobby of the Elysian Hotel
Lobby of the Elysian Hotel